As the lights changed to signal the start of the Hungarian GP, Häkkinen came across from the second row and took the lead from M. Schumacher, who had managed to keep ahead of Coulthard, R. Schumacher, Barrichello and Frentzen. In the scrap at the start Villeneuve ran in the back of De La Rosa and lost his nose. Both drivers had to go back to the pits straight away to repair the damage to their cars and rejoined the race at the back of the field. By the end of the first lap the two McLaren, with the Ferrari of M. Schumacher sandwiched between them, were already leaving the rest of the pack behind. On lap eight Fisichella ran very wide and almost lost the car on the grass causing Button, who was following him, to lose his racing track and letting Irvine overtake both of them for seventh position. Fisichella lost several positions, ending up in 14th. On lap 10 Alesi had to go back to the pits with a steering problems and retired, continuing his run of bad luck. Häkkinen had marginally more speed than M. Schumacher and Coulthard and had been getting away, so much that on lap 11 he was already lapping the last car of the field, De La Rosa's Arrows, over five seconds ahead of M. Schumacher. On lap 14 Alesi rejoined the GP, several laps down. On lap 16 Fisichella, who had span twice already, came into the pits (9.6 seconds) for new tyres from 16th position.
The Benetton driver rejoined just on time to be lapped by race leader Häkkinen. The repairs to Alesi's car did not have the desired effect and the Frenchman had to retire, this time for real. Bad luck struck Prost again as Heidfeld struggled in the pits after refuelling. On lap 24 Irvine had his pit stop (10.00 seconds) from seventh position. The cars in the lead still made no sign of intending to stop, with Häkkinen some nine seconds ahead of M. Schumacher. On lap 26 M. Schumacher had his first pit stop (7.3 seconds) and rejoined behind Barrichello, leaving the two McLaren in first and second position. As R. Schumacher pitted (10.0 seconds), Barrichello let his team mate through into third place in chase of Coulthard. On the same lap Barrichello went for his pit stop too (6.7 seconds) and managed to come out in front of R. Schumacher, who had been holding him up since the start of the race. On the following lap McLaren brought Häkkinen in (7.0 seconds) and let him out in front of M. Schumacher and behind Coulthard. One lap later it was Coulthard's turn to pit (6.9 seconds), coming back out in third position in front of Barrichello, R. Schumacher and Frentzen. On lap 31 Fisichella, who had had any sort of problem, retired from the race. In the meantime, Coulthard had been eating up the gap between himself and M. Schumacher and was getting ready to attack the Ferrari, who was 15 seconds behind Häkkinen in the lead. On lap 43 Häkkinen started lapping the back of the field for the second time.
On lap 48 Gené was given a 10 seconds stop-go penalty for ignoring the blue flag. On the same lap Barrichello had his seconds pit stop 8.7 seconds) and came out in behind R. Schumacher. On lap 51 M. Schumacher came in for his second pit stop (7.7 seconds) and let Coulthard in second position. On the same lap R. Schumacher too had his seconds pit stop and rejoined behind Frentzen. On the following lap Coulthard had his second pit stop (6.6 seconds) and came out just as M. Schumacher stormed past. The positions stayed unchanged from before the pit stops, with M. Schumacher in seconds position and Coulthard in third, pushing to overtake the Ferrari. On lap 53 Häkkinen went for his second pit stop (6.8 seconds), easily retaining the lead. On lap 57 Frentzen finally went for his second pit stop, losing his position to R. Schumacher. With 17 laps to go Herbert span as Villeneuve overtook him and stopped on the track, but managed to keep the engine going and went back to the race. On lap 55 Diniz stopped by the side of the track with smoke coming out of his Sauber and retired. With nine laps to go Herbert span again and stopped on the track as before, again keeping the engine running and rejoining the race. A couple of laps later the Jaguar driver stopped for good and retired. With only five laps to go Mazzacane suffered a blown engine on turn thirteen, stopped by the side and retired. Jarno Trulli caught up with Button, who was struggling with engine trouble, and overtook the Williams for seventh place. Nothing changed in terms of position until the end of the race, won by Häkkinen ahead of M. Schumacher, Coulthard, Barrichello, R. Schumacher and Frentzen.

The result of a very boring Hungarian GP was a change in the lead of the Drivers and Constructors Championships. Nothing of note happened during the race, Häkkinen stormed ahead at the start and stayed there unchallenged and unchallangeable throughout the whole GP. Coulthard never tried to attack M. Schumacher despite being of the Ferrari's tail for almost the whole race. The hero of the German GP, Barrichello, just drove anonymously lap after lap, overtaking R. Schumacher only thanks to Ferrari's good as usual pit stop strategy. Fisichella was plagued by setup problems, but did not lose his position in the Drivers Championship.